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pb33
June 21, 2022
Question

Short Term Disability

  • June 21, 2022
  • 1 reply
  • 0 views

I've read through "Enter non-taxable third party sick pay" in this support section, however it does not mention anything about how the employer pays for their portion (FICA/Medicare) of the disability payment - will it calculate when I create the paycheck? and then automatically enter onto the 941 when that is created?

And the very last step says to print the paycheck - why would I do this when the third party has already paid the employee?

I've tried contacting the support people and they are kind of clueless. Any assistance will be appreciated!

1 reply

AlcaeusF
AlcaeusF
June 21, 2022

Hi @pb33,

 

I'm glad to see you posting here in the Community about your payroll concern. I can assist you with entering short-term disability payments in QuickBooks Desktop.

 

Although sick payments includes pre-tax dollars, some plans make payments with after-tax dollars. If this is the case, sick pay becomes non-taxable.

 

The Enter non-taxable third-party sick pay  article guides users on how to track third-party sick pay on paychecks. Since you'll add the addition and deduction item during the process, It'll not calculate any portion of the taxes.

 

The amount paid will show automatically on the correct tax forms. Please note how it reflects and which forms it shows up will depend on the tax tracking type of your payroll items.

 

Also, printing the paycheck is only optional. Just in case you need a copy, you can do so by following the article.

 

The way you track third-party sick pay, like disability payments, depends on the situation. These are the three scenarios you can check to determine how you can enter the payment:

 

  • Scenario 1: Employer withholds taxes and submits W2
  • Scenario 2: Third-party withholds, employer submits W2
  • Scenario 3: Third-Party withholds taxes, and submits W2

 

Additionally, you can use this article to learn how to track third-party sick pay if you upgrade or use QuickBooks Desktop Payroll Assisted: Report third-party sick pay to QuickBooks Desktop Payroll Assisted.

 

Let me know by leaving a comment if you need more guidance with entering disability payments in QuickBooks. The Community and I will be sure to get back to you.

P
pb33Author
June 21, 2022

Thank you for your reply, AlcaeusF

 

I've followed the steps for Scenario 2 - but now am DEEPLY confused  in the Company Liability Adjustment section Step #6.  I don't understand which one I am supposed to choose - knowing if I choose "do not" it will not affect the accounts and if I choose "Affect" it will affect them - is the adjustment supposed to affect these accounts or not? 

C
ChristineJoieR
June 21, 2022

Thank you for returning to the thread, @apb33. I also appreciate your effort in following the steps in the article given.

 

I'm here to clear up any confusion you may have about your company's liability adjustment.

 

Since the adjustment is for the company, it reduces the 940/941 tax amount due in the Pay Scheduled Liability but not the amount in the 940/941 form. For this reason, the form will have to be manually adjusted. 

 

Furthermore, I recommend contacting your tax advisor to see if any accounts are affected during the process.

 

I added the following articles that can be your reference in filing Federal 941/944 and 940 taxes and forms:

 

 

Tap the Reply button, if there are things you still need to clarify about the topic or need additional assistance with your tax forms. I'll be around to lend help. Have a nice day!

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